Trump Tax Proposals Would Provide Richest One Percent in Colorado with 52.5 Percent of the State’s Tax Cuts

Earlier this year, the Trump administration released some broadly outlined proposals to overhaul the federal tax code. Households in Colorado would not benefit equally from these proposals. The richest one percent of the state’s taxpayers are projected to make an average income of $1,845,700 in 2018. They would receive 52.5 percent of the tax cuts that go to Colorado’s residents and would enjoy an average cut of $142,190 in 2018 alone.

Officials in the Trump administration have said that their tax plan will help the middle-class, but that is not true of the proposals they have put forward so far. For example, in Colorado, the middle fifth of taxpayers in terms of income are projected to make an average income of $56,700 in 2018. This group would receive just 6.7 percent of the tax cuts next year in Colorado compared to the 52.5 percent of the tax cuts received by the richest one percent of the state’s residents.

Bottom 60 Percent of Taxpayers in Colorado Would Receive Just 10.8 Percent of the Tax Cuts in the State

The bottom three-fifths of taxpayers (the lowest-income 60 percent of taxpayers) in Colorado will all make less than $69,500 in 2018. They would gain very little, just 10.8 percent of the tax cuts that go to residents in the state. The average tax cut for this group next year would be $490, which is tiny compared to the average $142,190 going to the richest one percent.

Some middle-income taxpayers would even pay higher taxes under Trump’s proposal. (See ITEP’s longer report for more details.)

Price Tag of Plan Would Mean Cuts in Public Investment that Working People Rely On

Trump’s tax proposals would reduce total federal revenue by at least $4.8 trillion over ten years. In the short-run this might just mean higher government deficits, but eventually Congress and the President would almost surely have to cut major programs like Medicare, Medicaid, food assistance and others to offset the costs. Low- and middle-income families would probably lose far more as a result than they gain from the small tax cuts President Trump would provide them.

Tax Cuts Can Be Measured in Several Ways, But This Plan Favors the Rich Under Any Measure

Politicians who propose tax cuts sometimes argue that no one should be surprised if they mostly benefit the rich. They argue that the rich make most of the income, so of course they receive most of the tax cuts.

But their argument is misleading. The richest one percent receive a larger tax cut than everyone else under Trump’s proposals even when it is measured as a percentage of their income. In Colorado, the richest one percent would receive a tax cut equal to 7.7 percent of their income. The bottom three-fifths of taxpayers in the state would receive a tax cut equal to just 1.4 percent of their income.